Give businesspeople a little credit

I'm with Jonathan Bernstein on this one: the reason that the economy isn't growing robustly just can't be that American businesspeople are terrified of tight new regulations that the Democrats are going to impose any day now but just haven't gotten around to imposing yet.

Look, I've never started a business. But my impression of businesspeople is that if they think they have a money-making idea and they can get the necessary capital together, they're going to start a business regardless of which party controls the White House or the Congress. And if they think they can make more money by expanding, they're going to do that as well.

It may well be true that a substantial chunk of business leaders, perhaps even a majority, prefer that Republicans control the government. But, generally speaking, they're in business to make money, not to prove some political point. They're also capable of doing a little research, and they know that businesses did very well in the last Democratic presidential administration.

If businesses aren't hiring right now, it's probably because they're not convinced that taking on more employees will be a profitable move at this point in the economic recovery. That's not nuts. Demand for a lot of products is still low thanks to the nastiest recession since World War II. But to suggest that businesses aren't hiring because they're terrified of the socialist takeover that's coming any day now but somehow just hasn't come yet strikes me as silly and more than a little insulting to entrepreneurs. I doubt most of them are that irrational or timid.

Similarly, I question Denver mayoral candidate Chris Romer's claims that removing red tape will allow Denver's businesses to suddenly start hiring. If there truly are regulations that protect no one and just annoy businesspeople (an iffy proposition), sure, get rid of them. But I just can't imagine there are business owners sitting around saying, "I could make a mint by expanding my business right now, but I just don't want to fill out all those damned forms."

More on government not being a business

House Majority Whip Kevin McCarthy (R-CA), speaking about high-speed rail:

If you can't prove it's viable from a business plan, it's not a (project) the government should be funding.

I'm pretty sure this is the opposite of true. If something is viable as a business, it does not need government funding. Such funds should be reserved for things like education, health care for the poor and elderly, police, a military, etc., that are inherently unprofitable.

(via Calitics)

Government as a business

Matt Yglesias and Steve Greene both hit on an important theme today: the rather perverse notion that government should be run like a business. As Steve notes, school administrators who follow this logic end up seeking to remove special needs kids from schools because they're too costly to educate. Matt takes the argument to its logical conclusion: people over the age of 70 are unproductive and harmful to the bottom line, and should therefore be terminated and harvested for their organs.

There's nothing wrong with the idea that governments should be run more efficiently or with better customer service, and if that's what people mean, they should say that. But to say that governments should be run like businesses is to reveal ignorance about what either governments or businesses -- or both -- are. Businesses exist to turn a profit. They provide goods and services to others only insofar as it is profitable to do so, and they will set prices in a way that ends up prohibiting a significant sector of the population from obtaining those goods and services. And that, of course, is fine, because they're businesses. Governments, conversely, provide public goods and services -- things that we have determined are people's right to possess. This is inherently an unprofitable enterprise. Apple would not last long if it had to provide every American with an iPad.

I'm also always surprised to hear people tout the efficiency of the private sector. There's a great deal of inefficiency in the private sector, of course. How many CEOs end up hiring dim, unqualified brothers-in-law or grandkids who are taking time off college? And that's just not considered a big deal as long as it doesn't noticeably hurt the bottom line. If a member of Congress does that, it becomes a major scandal.

This isn't to say that government is a paragon of efficiency and thrift, either, but there's a whole subfield in journalism and several citizen activist groups devoted to rooting out waste in the public sector. There's not much interest in rooting out waste in the private sector unless a business is seen as misusing public money (e.g.: Halliburton). And again, that's fine -- they're private entities that are free to do what they want with their money. But let's not just assume they're waste-free and that our governments would improve by emulating them.